TMI Blog2022 (6) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the assessee society is a charitable organization despite the fact that the assessee society was doing business within the meaning of amended provisions of section 2(15) of the Income Tax Act, 1961. 2. On the basis of facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the assessee society is covered under principle of mutuality in view of the judgement of Hon ble Supreme Court in the case of Bangalore Club vs CIT 350 ITR 509 (SC). 3. Brief facts of the case are that return of income was filed on 02.12.2016 disclosing Nil income. In the assessment order, the Assessing Officer noted that the society is registered under section 12A vide order dated 13.01.1989 and is also approved for the purpose of section 80G(5)(vi) vide order dated 19.07.2011. That as per the Memorandum of Association, the primary aims and objects of the assessee, among others, are to broadly promote sustainable habitat, through interlinkages between Institutions having physical space in the complex , work in various ways on environmental issues and spread awareness about the same, develop a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s objective. It was, therefore, held that the assessee institution was not entitled to exemption under section and also under mutuality and the income was computed under Chapter IV of the Income Tax Act. Assessment was completed at a loss of Rs. 74,03,936/-. 5. Against the above order, the Revenue appealed before the Ld. CIT(A). The ld. CIT(A) elaborately noted all the submissions of the assessee. Thereafter, he referred to the earlier order of the Ld. CIT(A) in assessee s own case and order of the ITAT Hon ble Delhi High Court in assessee s own case. The issue has been decided in assessee s favour. The order of the Ld. CIT(A) in this regard reads as under:- 4.1.1 I have considered the assessment order and the submissions of the appellant. I have also considered the orders of my Id. predecessors for assessment year 2011-12 (Appeal No. 125/20 14-15), assessment years 2012 -13 (Appeal No. 23/2015 -16), assessment year 2013- 14 (Appeal No. 248/2015-16) and my order for assessment year 2014- 15(Appeal No. 195/2016-17). The facts of the case for assessment years 2012-13, 2013-14 and 2014-15 are same as those for the year under consideration, i.e., 2016 -17. 4.1.2 On the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption provided to such organizations under the IT Act. Moreover it is well recognized that the IHC is a public institution with thousands of members. All the surpluses generated by the IHC are used to maintain and improve the infrastructure or to undertake various charitable activities in accordance with its aims and objectives. There is no case made out that the surpluses are being appropriated by any individual or by a group of individuals. In the light of the above I have no hesitation in accepting these grounds and therefore these are all allowed. IHC should therefore continue to be treated as a charitable organization as has been decided by the CIT Appeals in the past. Moreover keeping in view the decision of the Delhi High Court in the case of IHC itself (judgment dated 12.10.2011) such a conclusion is also supported by the principle of Consistency quoted by the High Court in its aforesaid judgment as there has been no fundamental change in the nature of the activities of the assesse. 4.1.3 For the assessment year 2009-10, the Hon'ble ITAT Delhi Bench C , in ITA No. 4024/Del/2012, while dismissing the appeal of revenue on the issue of taxing the interest income by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of completeness it is necessary to give a specific finding on this important point. 6.4 The assesse has pointed out that the Delhi High Court vide its judgment delivered on 12th October 2011 took note of the fact that from Assessment Year 1988- 1989 to Assessment Year 2006-2007, the activities of the Centre stood accepted as being charitable in nature. Even for Assessment Year 2007- 2008, the activities of the Centre were held to be charitable and the benefit of Section 11/12 of the Act was given to the Centre. It is only from Assessment Year 2008-2009 that the AO came to hold that the activities of the Centre are not charitable in nature and applied the Principle of Mutuality. The Commissioner (Appeals) in respect of Assessment Years 2008-2009, 2009-2010 and 2011- 2012 has held that the activities of the Centre are charitable in nature. In respect of AY 2008-09 the Income Tax Department had filed an appeal to the High Court against the order of the IT AT upholding the order of the Commissioner Appeals. In view of this position the assesse has argued that it should be given the benefits of charitable status as well as benefits of the principle of Continuity. 7.2 While ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in the judgment as there has been no fundamental change in the nature of the activities of the assessee and also in line with the observations of the Hon'ble ITAT in appellant's own case for assessment year 2009-10 in ITA No. 4024/Del/2012. On the issue of mutuality also, in the judgment of the Hon'ble Delhi High Court in the appellant's own case in order dated 12.10.2011 the principle of consistency was applied to the assessee. Since there is no fundamental change in the nature of activities of the assessee for periods prior to assessment year 2008 - 09 and subsequent years and the fact that the Assessing Officers have consistently treated the appellant as a mutual association from assessment year 2008 - 09, the appellant has to be given the benefit of mutuality. 6. Against this order, the Revenue is in appeal before us. 7. We have heard both the parties and perused the records. The ld. counsel for the assessee submitted that this issue is squarely covered in favour of the assessee by the earlier decision of ITAT as well as Hon ble Delhi High Court in assessee s own case. 8. Per contra, the Ld. DR could not dispute this proposition. 9. Upon ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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